MTN's Iranian plans said to hit wall of new US sanctions

MTN Group’s $750m plan to extend fibre home broadband connections to Iranian cities has been put on hold because of looming economic sanctions imposed by US President Donald Trump, according to people familiar with the matter.

A plan devised a year ago for Africa’s largest wireless carrier to buy a stake and extend loans to state-owned broadband provider Iranian Net has made little progress, said the people, who asked not to be identified as the information isn’t public. The Iranian government hasn’t been able to contribute funding as it battles to shore up the economy and arrest a currency slump, they said.

MTN [JSE:MTN] will update shareholders on Iran as part of a first-half results announcement scheduled for August 8, according to a spokesperson.

The Johannesburg-based company had 43 million customers in the country at the end of 2017, its second-biggest market after Nigeria. Iranian Net was founded in 2011 to provide high-speed broadband, but has missed several deadlines due to a lack of capital, according to the people.

Trump’s decision to withdraw from an international nuclear deal with Iran and reimpose an embargo on energy and financial sectors is proving a headache for MTN and other international companies. Under previous sanctions lifted following a 2015 deal, the wireless carrier had about $1bn stuck in the country, which it only managed to repatriate last year.

Under new Chief Executive Officer Rob Shuter, MTN has vowed to exit or sell markets that it sees as more trouble than they’re worth, and disposed of its tiny Cyprus business earlier this month. However, Iran’s size makes it likely the South African company will look to see out the current impasse, given the importance placed by MTN on its three biggest markets, which also include South Africa.